Students and donors press lawmakers to ban scholarship displacement
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Summary
Witnesses at the committee hearing urged passage of HB 5,158 to stop colleges from reducing institutional aid when students receive private or public scholarships, arguing the practice undermines donors’ intent and leaves students with unchanged net aid.
At a public hearing Feb. 20, students, scholarship donors and higher‑education officials urged the committee to advance HB 5,158, which would restrict colleges from offsetting outside scholarships by reducing institutional grants or work‑study awards.
"Scholarship displacement occurs when a college reduces a student's financial aid by the same amount of that private or outside scholarship, leaving the students with little or no financial benefit from the award they earned," Elaine Mintz of the Fairfield County Community Foundation told the committee, summarizing the practice and the foundation's statewide survey.
Student speakers described how the practice plays out in some schools: Micah Draper of Yale's College Council said Yale limits outside scholarships to what the university calls the "student share" (about $3,700), and any additional private aid effectively replaces institutional support rather than reducing the student’s net cost. Student advocates and community foundations said that discourages private philanthropy and penalizes the students who seek awards.
Advocates urged two targeted changes: clarify that aid adjustments should apply only when outside non‑loan aid exceeds the student’s cost of attendance, and require that, when adjustments are necessary, loans be reduced before grants or work‑study. Elaine Mintz said her foundation found many Connecticut institutions publish displacement practices and some already reduce loans before grants — examples she called best practices.
University representatives including Mona Lucas of UConn described their institutional approach: apply outside scholarships first to unmet need and reduce loans before grants when packages exceed cost of attendance. Still, donors and students said the state law would create a uniform floor for practice and better protect donor intent.
The hearing included lengthy committee discussion about the timing of scholarship awards and the operational complexities of aid packaging; no committee action was taken at the hearing.
